REXR

We rate Rexford Industrial Realty, Inc. (REXR) as a Reduce with a composite score of 44.0/100 at a current price of $37.13. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.

The rating is primarily driven by strength in value (52th percentile) and quality (49th percentile), which together account for the majority of the composite score. Offsetting weakness in momentum (33th percentile) and investment (40th percentile) tempers our overall conviction. We assign a Narrow Moat rating (41/100), Medium uncertainty, and Standard capital allocation.

Key items to watch: momentum to confirm whether the current price trend has legs. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

Rexford Industrial Realty, Inc. holds a top-quartile position (#0 of 50) within the Finance, Insurance, And Real Estate sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 44.0/100 places it at rank #2966 in our full 7,333-stock universe. At $9.7B in market capitalization, Rexford Industrial Realty, Inc. is a mid-cap player in the Finance, Insurance, And Real Estate space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue is growing at 7%, though momentum at the 33th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 76% (-0.6pp vs sector) narrow to operating margins of 38% (+21.4pp vs sector) and net margins of 35.9%, yielding a gross-to-net conversion rate of 47%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $37.13, Rexford Industrial Realty, Inc. is trading near fair value based on current fundamentals. Our value factor score of 52/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 24.4x (a 104% premium to the sector median of 11.9x), EV/EBITDA of 17.4x (at a premium), P/B of 1.0x, P/S of 8.8x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis finds only partially justified by current fundamentals.

We assign a Medium uncertainty rating to Rexford Industrial Realty, Inc.. The stock presents a balanced risk profile: risk factors are within normal ranges. While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.

We identify no major risk factors at this time. The company's stability factor sits at the 49th percentile with quality at the 49th percentile, both of which support our low-risk assessment. The absence of material leverage, profitability, or volatility concerns reduces the likelihood of a permanent capital loss scenario.

Key risk mitigants include: healthy gross margins of 76% provide a buffer against cost pressures; a 4.15% dividend yield anchors total return. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate Rexford Industrial Realty, Inc.'s capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 4.0%, and the balance sheet is managed within acceptable parameters (D/E: 37%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; Rexford Industrial Realty, Inc. falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. The 4.15% dividend yield provides some income return, but the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, Rexford Industrial Realty, Inc. receives a Reduce rating with a composite score of 44.0/100 (rank #2966 of 7,333). Our quantitative framework assigns a Narrow Moat (41/100, trend: stable), Medium uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 45/100.

Our analysis does not support a constructive view on Rexford Industrial Realty, Inc. at this time. The combination of the current quantitative profile, medium uncertainty, and standard capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.